UNION OF INDIA vs M/S NITDIP TEXT. PROCESSORS (P)LTD.

The Supreme Court upheld the High Court's ruling that Section 87(m)(ii)(b) of the Finance (No. 2) Act, 1998 is unconstitutional as it violates Article 14 of the Constitution by arbitrarily excluding certain taxpayers from the Kar Vivad Samadhana Scheme based on the date of issuance of notices. The Court agreed that the classification created by the cut-off date is irrational and does not serve the purpose of the Scheme, which aims for a voluntary settlement of tax dues. Consequently, the Court directed the Revenue to reconsider the claims of the respondents for benefits under the Scheme.